Education Department Struggles with PSLF Buyback Applications, Delays Persist

KEY TAKEAWAYS

• The Department of Education has about 86,520 Public Service Loan Forgiveness (PSLF) Buyback applications pending.
• For the most part, the Education Department is receiving PSLF Buyback applications faster than it is processing them.

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Still waiting to hear about your loan forgiveness application? You aren’t the only one facing serious processing delays.

The U.S. Department of Education tracks and reports the number of pending applications for the Public Service Loan Forgiveness Buyback program. Its reports demonstrate that the Education Department has been unable to make significant progress on pending PSLF Buyback applications. As of Jan. 31, there were 86,520 pending applications for this student loan forgiveness program.

Why This Matters

Student loan payments can be a burden for many borrowers. Borrowers who receive student loan forgiveness, especially public servants who generally make less than other college graduates, can instead put their money towards other goals and responsibilities, like savings, investing, and caring for their families.

The PSLF program forgives the remaining balance of a student loan borrower’s debt after they have made 120 monthly payments, provided they were a public servant while making those payments. Public servants include government workers, teachers, firefighters, and some non-profit workers.

Typically, months spent in forbearance or deferment do not count toward loan discharge under PSLF. However, the PSLF Buyback program allows public servant borrowers to pay back the total amount missed while their payments were paused.

For example, consider a borrower with a monthly payment of $300 who was in forbearance for six months. To qualify for the PSLF Buyback, they would have to be working for a qualifying public service employer while in the forbearance and pay $1,800 to “buy back” their missed payments.

In the latest report on application numbers, the Education Department made a decision on 2,430 applications. That is less than half the 5,030 new PSLF Buyback applications it received the same month.

Many borrowers applying for the PSLF Buyback program have been in a mandatory administrative forbearance under the Saving on Valuable Education program. This income-driven repayment plan, which at its peak had about 8 million borrowers, has been paused since July 2024 due to several lawsuits challenging the plan’s legality.

Since the SAVE plan has been in limbo, loan servicers and the Department of Education have struggled to keep up with applications for PSLF Buyback, requests to change repayment plans, and applications for loan forgiveness through income-driven repayment plans.

However, in January, servicers and the Education Department had made progress in processing applications requesting to move to income-driven repayment plans and to obtain forgiveness through those plans. While 626,412 applications to move to an income-driven repayment plan were still pending, 379,702 were decided the same month.

Related Education

What Is Public Service Loan Forgiveness (PSLF)? A Complete Guide

Student Loan Forgiveness by State

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